Saturday, March 20, 2010

Slum-like living conditions

BBC reported that according to a report from the UN, in the last decade a quarter billion people graduated from slum-like living conditions. (Find the report here) This, an UN official said, was due to conscious government policy in the developing nations. However, whether we should accept this as a good thing is what I want to draw your attention to. No, I am not one of those village romantics, in fact quite the opposite. Cities are where people learn new skills and innovation takes place. That is where civilization comes from. But it is just that what we (people of the developing nations) understand of urbanization is a very western dominated concept – not suitable for a developing country. The question is what do we see as cities – do we see 5 star hotels and expensive cars or do we see a compact, functional and efficient agglomeration.

Why this is particularly relevant to developing countries is because more and more people are moving towards the cities. If for the time being and for the sake of free democracy, we keep Thackrey policies out as an option, then the government will have to find ways to accommodate the immigrants which would mean additional resources [Build roads, metros, outskirt cities etc.]. However governments of developed countries simply do not have the resources to build cities for large part of their populations. Even if they did, there will be other associated problems to keep these cities going, power for example.

To me it is just not sensible spending. Why waste resources squandering away money when there are more resource efficient ways of delivering output? US Cities are definitely not the most energy efficient creations. Most urban transport corporations of the world lose money (even in developed countries). While cities do attract companies (Silicon Valley), we should understand that it is not because it was such a great city that companies settle there. Most often, the decision of companies are governed by government policy, availability of human resources and cost efficiencies. Look at the movement of BPO companies to Tier 2 cities and villages. They are doing so because now they have the required man power, the government will allow them to make money with supportive policies and they can invest in internet infrastructure to keep them connected. The costs are obviously lesser. So first thing to be understood is cities are not the only way to attract investments.

Given this, should we as a nation think of energy guzzling cities or should we think of outsmarting the westerners? India is known for being resource intensive and it is that, more than anything else that has helped us tide over the financial crisis. The common man in India knows how to save. The women of India know how to use the tin of the coconut oil as pots for plants. We know how to save money and that is what we should never forget to do. I feel increasingly our city dwellers are forgetting how to save. The economy will do much better if the super riches in the city withdrew from lavish marriages and parties and instead put that money in the bank.

Look at the slums in India. It is fool hardy to think that we can bring these people to high rise buildings. These people need the money; they will rent those buildings and go back to slums. The whole idea of making wide roads and having gardens outside houses is a phoren concept simply not applicable to India. What we need is to support these slums, make them free from diseases, build schools in them and make them liveable. We should connect them through roads so that they become centers of excellence. In fact there is about a billion dollar industry running in Dharavi slum in Mumbai and the average dweller makes about Rs 120 – Rs 150 per day (836 million people in India live on less than Rs 20 per day – Arjun Sengupta Report). There is growing recycling and tanning industry running in the slums of Mumbai. And so, while the queen of England might want to put her handkerchief to her nose, she would be scared because the slums generate money with far greater efficiency.

Similar is the slaughter house in Idgah – the one that runs near sadar bazaar in Delhi, probably the most efficient land usage example. One can argue, that our competitiveness might go away once the wage rate rises and the only reason why we are competitive is because of the low wage rate, that we need to invest in productivity, but whether we remain competitive is a lot more to do with government policies than individual actions. Nobody invests more in R&D and technology that probably the US, still it takes millions of dollars of subsidy for US to sell its agricultural produce. More often than not, any industry will make all efforts to make it competitive when the need arises because its survival depends on it. The reason why Japanese became super efficient is because of the policies of Japanese Ministry of International Trade and Industry (MITI) after it was devastated by war. What I am trying to impress, is simply that necessity is the mother of invention and I for one do not need to worry about the resourcefulness of the Indians. Let’s not become blind to the inventiveness. It’s a shame that Harvard Business study had to bring the Mumbai dabbawallas to our notice. In fact have a look at this site to get an idea of how the slum dwellers use YouTube to improve living conditions. What the government needs to do is just support these industries with what they need – roads, sanitations, health and education. There have to be low fee nearby schools and hospitals, they should learn about safety from water borne diseases for example. Leave the rest of the wonders to them.

Coming back to the core issue, there is a serious need to rethink what cities in India should look like. People are moving towards cities and people will move towards cities. Increasingly cities will get congested, traffic jams will be there and slums will be formed. We know we do not have the resources to create a city of lights. Maybe we should not in the first place.

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